Plug Power (PLUG) CEO Andy Marsh brushed off Wall Street’s concerns about the hydrogen fuel cell developer’s future after PLUG shares fell on the company’s survival warning.
“We feel pretty confident when we look at everything,” Marsh told Yahoo Finance (video above). “When we look at our ability to manage through this, we will be fine. We are talking to people about opportunities to raise much more money than we need. And we’re just trying to do it wisely so that our investors are well off in the long term. “
Plug Power shares fell on Friday and remained under pressure on Monday. The selling came after the company reported weaker-than-expected results and issued a “going concern” warning about its potential inability to finance operations over the next year.
“In light of the Company’s anticipated capital expenditures and operating requirements under its current business plan, the Company expects that its current cash and available-for-sale securities will be insufficient to fund its operations over the next 12 months,” the company wrote in a filing published Thursday. “These circumstances and events raise significant doubt about the Company’s ability to continue as a going concern.”
On Monday, Marsh painted a rosier picture of the company’s outlook, saying the company plans to move “prudently” so that investors are “well positioned over the long term.” He stressed that the company has “zero debt” along with a “debt-free balance sheet of $5 billion.” Marsh also said Plug Power is considering a range of options, including debt financing to raise $500 million, as well as slowing the opening of plants.
“I’d be disingenuous if I didn’t say this was a bump in the road. But we have strong demand from major customers,” Marsh said.
Delivery stocks are down more than 70% year to date, with clean energy stocks taking a hit, driven by concerns about rising rates in a capital-intensive sector, and falling valuations.
“If the market was growing a little faster, it would be easier,” Marsh added.
In the third quarter, Plug Power reported a loss of $0.47 per share, which was wider than the loss of $0.30 per share that Wall Street had expected. Net revenues for the quarter were $198.7 million. The company’s net loss in the quarter was $283.5 million.
In its earnings statement, the company blamed the loss on “unprecedented supply challenges” for hydrogen, saying that contributed to volume constraints and deployment delays. The disruptions come as Plug looks to commission two new green hydrogen production plants in Georgia and Louisiana. The Georgia plant alone, scheduled to open at the end of this year, will be enough to ease the pressure, Marsh said.
Following Plug’s results on Thursday, JPMorgan, Oppenheimer and RBC Capital downgraded the stock and lowered their price targets.
“While we believe Plug Power can weather its current cash flow issues, the current operating and capital markets environments are challenging,” JPMorgan’s Bill Peterson wrote in a note to clients. The analyst downgraded the stock to neutral and lowered the price target to $6 from $10 per share.
Akiko Fujita is an anchor and reporter for Yahoo Finance. Follow her on Twitter @Akiko Fujita.
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